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The U.S. House of Representatives approved by voice vote June 18 a bill (H.R.
3668) to enhance sentencing and fines for trafficking in counterfeit drugs.

The bill would set the same penalties for drug counterfeiting as those for
trafficking in military goods and services.

The Senate version of the bill, S. 1886, as passed in March, would generally
double fines and prison sentence maximums compared to current enforcement. The
House version would go further, increasing fines to individuals to $5 million
and allowing for a prison sentence of up to 30 years for a repeat offender.

In the 15-minute discussion leading up to the House vote, it appeared that
the Senate was aware of and in agreement with the H.R. 3668 penalties. Both the
bill's sponsor, Rep. Patrick Meehan (R-Pa.) and Rep. Lamar S. Smith (R-Texas)
called the legislation a “bipartisan, bicameral bill,” and Smith emphasized that
the Senate passed a bill under the same title without mentioning the
differences.

Sponsors Say Punishment Too Lenient.

Section 2320(a)(1) of Title 18, 18 U.S.C. §2320, describes as a counterfeiter
one who “traffics in goods or services and knowingly uses a counterfeit mark on
or in connection with such goods or services.”

Section 2320(a)(3) distinguishes trafficking when “such good or service is a
counterfeit military good or service the use, malfunction, or failure of which
is likely to cause serious bodily injury or death, the disclosure of classified
information, impairment of combat operations, or other significant harm to a
combat operation, a member of the Armed Forces, or to national security.”

Section 2320(b) then identifies the penalties for counterfeiters, with a
separate Section 2320(b)(3) for counterfeit military goods and services, but
otherwise making no distinction between trafficking in falsely labeled handbags
and falsely labeled drugs.

“While the manufacture and sale of any counterfeit product is a serious
crime, counterfeit medication poses a grave danger to public health that
warrants a harsher punishment,” Sen. Patrick J. Leahy (D-Vt.) said in
introducing S. 1886 in the Senate Nov. 17 (225 PTD, 11/22/11).

Meehan introduced H.R. 3668 Dec. 14 to match the Senate bill.

Senate Acts First, Then House Bumps Fines.

The bills as introduced sought to amend Section 2320(b) to incorporate a
provision setting maximum individual fines to $4 million for trafficking in
counterfeit drugs, drugs being as defined in Section 201 of the Federal Food,
Drug, and Cosmetic Act, 21 U.S.C. §321. The maximum fine for non-individual
entities would be $10 million. Those fines are double the maximums in the
current Section 2320(b)(1).

The maximum sentence for an individual drug counterfeiter's first offense was
increased from 10 years to 20 years.

The Senate approved S. 1886 by a voice vote March 6 (45 PTD, 3/8/12).

At a June 6 markup session, the House Judiciary Committee considered and
approved a substitute amendment to H.R. 3668 offered by Reps. Tom Marino
(R-Pa.), and Linda T. Sánchez (D-Calif.) (109 PTD, 6/7/12). The substitute H.R.
3668 set the same penalties for drug counterfeiting as those for trafficking in
military goods and services.

The bill would define, in Section 2320(a) of Title 18, a separate category of
counterfeiter who “imports, exports, or traffics in a counterfeit drug.” It
would then alter Section 2320(b)(3) to apply to “Counterfeit military goods or
services and counterfeit drugs.”

Differences in the Bills.

The approved House and Senate versions now differ in proposing fines and
sentences as follows:

Offense/Offender/Penalty

Current

S. 1886

H.R. 3668

First offense, fines Individual
Non-individual

$2 m$5 m

$4 m$10 m

$5 m$15 m

Repeat offense, fines Individual
Non-individual

$5 m$15 m

$8 m$20 m

$15 m$30 m

Imprisonment, individuals First offense
Repeat offense

10 years20 years

20 years20 years

20 years30 years

The bills differ in two other ways.

The House bill includes a provision requiring the attorney general to “give
increased priority to efforts to investigate and prosecute offenses under
section 2320 of title 18, United States Code, that involve counterfeit
drugs.”

The Senate bill would direct the U.S. Sentencing Commission to reevaluate
sentencing guidelines for such crimes.

The Senate and House will have to agree on a single text before the
legislation can be sent to the president for his signature.

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